Chapter 3

Multiple Choice Questions (10 points each) shoot the ONE, BEST Answer 1. Adjusting entries A. happen upon yet when income financial statement accounts. B. Affect only isotropy sheet accounts. C. Affect both income statement and balance sheet accounts. D. Affect only cash flow statement accounts. E. Affect only equity accounts. 2. An adjusting presentation could be made for each of the following just A. Prepaid expenses. B. Depreciation. C. Owner withdrawals. D.un hited revenues. E. accrued revenues. 3. Accrued revenues A. At the end of one business relationship period often result in cash receipts from customers in the following(a) period. B. At the end of one be period often result in cash payments in the next period. C. argon also called unearned revenues. D. atomic number 18 listed on the balance sheet as liabilities. E. Are demonstrateed at the end of an accounting period because cash has already been original for revenues earned. 4.On May 1, 2007 Giltus Advertisin g Company sure $1,500 from Julie Bee for advertising services to be spotless April 30, 2008. The Cash receipt was recorded as unearned fees and at declination 31, 2007, $1,000 of the fees had been earned. The adjusting debut on December 31 stratum 1 should include A. A debit entry entry to Unearned Fees for $500. B. A credit to Unearned Fees for $500. C. A credit to Earned Fees for $1,000. D. A debit to Earned Fees for $1,000. E. A debit to Earned Fees for $500. Problem (60 points) SHOW completely WORKA company has 20 employees who each earn $500 per workweek for a 5-day week that begins on Monday. December 31 of division 1 is a Monday, and all 20 employees worked that day. (a) Prepare the required adjusting journal entry to record accrued salaries on December 31, 2004. (b) Prepare the journal entry to record the payment of salaries on January 4, 2005. Dec. 31st, 2004DrCr Salaries expense$2,000 Salaries collectible$2,000 Jan. 4, 2005 DrCr Salary expense$8,000 Salary accou nt payable$2,000 Cash Paid$10,000Chapter 3